The Dubious Wisdom of Crowds

The assumption that the masses can be correct may arise from a theory that there is a certain wisdom in crowds. There has been some limited research on this to explain how a form of futures market can explain, for example, how the public could predict future election winners.

Practical results from the use of such theory has been non=existent. No real futures market has ever resulted from past attempts to implement such theories.

The problem here is that if crowds were prescient, there would be no booms and busts and no economic manias as have existed over past centuries. All securities markets would then be predicable.

On the contrary, evidence over the years suggests the opposite; crowds are invariably wrong.